Steel stocks off lows after minister says Centre considering safeguard duty on imports

FILE PHOTO: Workers load TMT bars into a truck at a factory in Mandi Gobindgarh, in the northern state of Punjab, India, October 19, 2024. REUTERS/Priyanshu Singh/File Photo

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Centre is considering to impose a safeguard duty on steel imports, Union Steel Minister HD Kumaraswamy said on December 12, in an attempt to check the deluge of cheaper imports from China.

"The process for considering safeguard duty is on," Kumaraswamy said at the sidelines of an event in New Delhi, adding that the Ministry is weighing a proposal to impose a 25% duty on steel imports.

Shares of steel majors Tata Steel, JSW Steel and JSPL are off lows of the day in anticipation of a positive ruboff.

Earlier in this month, the Steel Ministry had in a meeting with the Commerce Department proposed a 25% safeguard duty on select steel products imported into India. Steel, Commerce and Industry Minister Piyush Goyal were present in the meeting.

A final call on the imposition of the duty may be taken by the Finance Ministry based on the recommendations of the Ministry of Commerce.

Steel companies have increasing been facing cheap imports of steel which is impacting their competitiveness.

Steel Secretary had Sandeep Poundrik last month said more than 60% of steel imports come from nations with Free Trade Agreement (FTA) which attracts zero il duty, thus any duty hike will not have any impact on those shipments.

In a conversation with Moneycontrol, Sajjan Jindal, chairman and managing director of JSW Group had voiced concerns about the influx of Chinese steel into India, primarily through the Free Trade Agreement (FTA) routes. The issue is exacerbated by a loophole allowing Chinese steel to enter India indirectly through third-party nations that have trade agreements with India, he said.

TV Narendran, MD and CEO of Tata Steel - one of the country's largest steel producers - recently said that India should not allow Chinese steel makers to 'export their problems' to us, and had urged the government to 'take some actions'.

Read More: Why are cheap steel imports a concern for India?

India's steel imports from China have surged to 1.85 million tonne during the first half of the fiscal as compared to 1.02 million tonne a year ago.

Cheaper Chinese steel has affected the business of India's smaller steel mills who have had to scale down operations and consider job cuts. India, the world's second-biggest crude steel producer, became a net importer in FY24, and the trend has continued since then, with imports from China rising steadily.